The Hindu Business Line : Godavari Fert: Opportunity knocks

SHAREHOLDERS in Godavari Fertilisers can use the sharp uptrend in the stock price in the run-up to the open offer by Coromandel Fertilisers, to book profits on the major portion of their holdings in the stock. The open offer price of Rs.124 represents a substantial premium over prevailing stock price (now at Rs 91). In the home stretch to the offer, the gap may narrow. Only a portion of the holdings tendered are likely to be accepted. So investors can liquidate a large part of their exposures to get the benefit of the price spurt on such holdings.

This course can be considered as the price behaviour in cases of PSU disinvestments such as VSNL, IPCL, IBP and Hindustan Zinc, to name a few, suggests that stock price is likely to decline sharply once the open offer concludes. The offer opens on September 11.

BL Research Bureau

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